10-KPeriod: FY2020

INTEL CORP Annual Report, Year Ended Dec 26, 2020

Filed January 22, 2021For Securities:INTC

Summary

Intel Corporation reported record revenue of $77.9 billion for the fiscal year ended December 26, 2020, marking its fifth consecutive year of growth. The company experienced strong demand in its PC-centric business, driven by work-from-home trends, and saw growth in its data-centric businesses, particularly within cloud service providers and the communications sector. However, a higher mix of 10nm products impacted gross margins, and the company faced macroeconomic weakness in the enterprise and government segments. Intel continued to invest heavily in R&D ($13.6 billion) and announced a strategic divestiture of its NAND memory business to SK hynix Inc. The company also returned significant capital to stockholders through dividends and share repurchases, totaling $19.8 billion.

Financial Highlights

55 data points
Beta

Revenue

$77.87B

56.0% Gross Margin

Net Income

$20.90B

26.8% Net Margin

EPS (Diluted)

$4.94

Total Assets

$153.09B

Cash & Equivalents

$5.87B

Free Cash Flow

$21.61B

Financial Statements
Beta
Revenue$77.87B
Cost of Revenue$34.26B
Gross Profit$43.61B
R&D Expenses$13.56B
SG&A Expenses$6.18B
Operating Expenses$19.93B
Operating Income$23.68B
Interest Expense$629.00M
Net Income$20.90B
EPS (Basic)$4.98
EPS (Diluted)$4.94
Shares Outstanding (Basic)4.20B
Shares Outstanding (Diluted)4.23B

Key Highlights

  • 1Record revenue of $77.9 billion, up 8% year-over-year, driven by strong PC demand and data-centric growth.
  • 2Data-centric businesses grew 9%, approaching 50% of total revenue, with particular strength in cloud service providers and communications.
  • 3PC-centric business grew 8%, benefiting from increased PC usage for remote work and learning.
  • 4Gross margin declined by 3 percentage points due to a higher mix of 10nm products and lower margin adjacent businesses.
  • 5Significant investments in R&D ($13.6 billion) and capital expenditures ($14.3 billion) continued, with a focus on future process technology.
  • 6Agreement to divest the NAND memory business to SK hynix Inc. for $9.0 billion.
  • 7Returned $19.8 billion to stockholders through dividends ($5.6 billion) and share repurchases ($14.2 billion).

Frequently Asked Questions

Intel achieved record revenue of $77.9 billion in 2020, an 8% increase from 2019. Net income was $20.9 billion, a slight decrease from the previous year, reflecting investments and margin pressures. The company generated $35.4 billion in cash from operations and $21.1 billion in free cash flow.

The PC-centric business saw 8% revenue growth, boosted by demand for notebooks due to remote work and learning. The data-centric businesses collectively grew 9%, with strong contributions from cloud service providers and communications service providers, though enterprise and government segments experienced a decline. The NAND memory business (NSG) saw revenue growth driven by improved NAND pricing and bit growth.

A major strategic announcement was the agreement to divest Intel's NAND memory business to SK hynix Inc. for $9.0 billion. Intel also continued to invest heavily in R&D and capital expenditures, focusing on advancing its 10nm and future process technologies. The company also launched new product families, including 11th Gen Intel Core processors and expanded its data-centric offerings for 5G and AI.

Intel demonstrated a strong commitment to returning capital to shareholders, returning $19.8 billion in 2020 through $5.6 billion in dividends and $14.2 billion in share repurchases. The company also maintained significant investments in R&D and capital expenditures to support its long-term strategy.